Lincolnshire Oil Refinery Collapse Leaves Trail of Debt and Community Despair
The sudden and dramatic collapse of the Prax Lindsey Oil Refinery (PLOR) near Grimsby has sent shockwaves through the local community, leaving a devastating trail of financial ruin, job losses, and unanswered questions. The refinery's owner, oil baron Winston Soosaipillai, appears to have vanished from the scene after the business collapsed under a mountain of debt estimated at £1.5 billion last June.
Financial Fallout and Alleged Disappearance
The refinery's insolvency resulted in hundreds of workers being made redundant, with many seeing their expected redundancy packages slashed to statutory minimums. Meanwhile, Mr Soosaipillai and his wife Arani are reported to have abandoned not only the refinery but also their £5 million Surrey mansion, leaving behind repayments on a £783 million loan reportedly riddled with irregularities. It is alleged they departed with approximately £11.5 million in pay and dividends.
Government ministers have since frozen £150 million of Mr Soosaipillai's assets, which include North Sea oil fields and hundreds of petrol stations acquired through substantial borrowing. He is believed to owe around £250 million to taxpayers alone and now faces legal claims from administrators. Despite claims from Mr Soosaipillai that he remained in the UK and cooperated with liquidators, many believe he has absconded to Dubai.
Community Businesses Bear the Brunt
The collapse has had catastrophic effects on local businesses that relied on the refinery's workforce. Stephen Gorwood, 62, landlord of the Black Bull Inn in East Halton, described how his hotel occupancy plummeted following the liquidation announcement.
"All went well until that fateful Monday when Prax announced its liquidation," he told the Daily Mail. "I had a number of booking cancellations. And in the next five weeks, I had the equivalent of half a week's worth of bookings - which, as you can imagine, was a bit of a cash flow hit."
Mr Gorwood explained that regular refinery shutdowns for maintenance previously brought hundreds of contractors to the area for weeks or months at a time, providing a vital boost to the local economy. "That would happen several times a year," he said. "You'd get the same guys coming back. I'd get a phone call asking for a room, and that was how it worked. But all that lot has come to a halt."
Phillips 66 Takeover and Job Losses
The refinery was purchased by American rival Phillips 66 in January, but this has brought little comfort to the community. The new owners plan to 'mothball' the site rather than continue refining operations, confirming permanent job losses. The 250 staff still employed at PLOR only have their jobs secured until March 31, down from 420 before the liquidation.
Jimmy Weir, who runs The County pub-hotel in nearby Immingham, expressed fury at both Mr Soosaipillai's disappearance and the government's response. "It stinks. The government wants f****** actually. They stepped in and bailed the Scunthorpe steelworks out, and they're not doing nothing here," he told the Daily Mail.
The Unite union has campaigned vigorously against the mothballing plans, with general secretary Shannon Graham stating: "Phillips 66 should not be allowed to just mothball the site and turn it into a glorified storage tank."
Personal Stories of Financial Ruin
An anonymous Lindsey Oil Refinery employee of 16 years faces losing his job within two months. His father reported that his redundancy package would be reduced from around £100,000 to just £11,000 due to statutory minimums applying after liquidation.
The employee explained: "It's through statutory because the refinery went into liquidation. I've got a trade that I can fall back on, so I'll go do that, but apart from that, nothing."
Catherine Bell, a retired pensioner whose son, daughter, and son-in-law all work at the refinery, expressed deep concern for her family's future. "They'll have to look for jobs when there are none. My daughter's got three kids. Obviously, they're wondering what they're going to b***** do once they all got told to go," she said.
Wider Economic Impact
The ripple effects extend throughout the local economy. Jessica Gleddhill, 43, who runs the Pelham Hotel in Immingham, reported that her accommodation business is currently running at a £200 weekly loss. "We've hardly got any bookings at all since June. We've got 10 rooms, and I've only had two bookings since the end of November," she said.
Shopkeeper Louise Spalding, 45, has noticed changed spending habits at her Heron Foods store. "People are coming in less and budgeting. They're concerned about spending and how much it is," she observed. "The only reason you notice is that you're at the till and you hear they've got a set budget. But it's not nice at all."
Refinery's Troubled History
Mr Soosaipillai purchased the PLOR from French oil company Total in 2021, but the site recorded £75 million in losses under his ownership. Lindsey was one of Britain's last five oil refineries, responsible for 10% of the country's fuel production. Remarkably, weeks before the collapse, Mr Soosaipillai had assured Energy Secretary Ed Miliband that operations were running smoothly.
The collapse accelerated when oil provider Glencore called in a £53.6 million debt for crude supplied to Prax. At that moment, there was reportedly just £203 left in the refinery's bank account. Glencore seized control of all oil and products from Prax as per their supply agreement, preventing Mr Soosaipillai from selling any petroleum products without their approval.
Government and Phillips 66 Response
Energy Minister Michael Shanks defended the sale to Phillips 66, stating: "This agreement marks the next step in securing an industrial future for the Lindsey site and the workers, who were badly let down by their former owners."
A Phillips 66 spokesperson confirmed: "While the Lindsey Oil Refinery site will not reopen as a refinery, the acquisition of the assets will support employment at the Humber Refinery, bolster the local economy, and encourage investment in the region." The company plans to refine Venezuelan crude and expects to complete the transaction in the first half of 2026.
Despite the hardships, community spirit remains strong. Hotelier Stephen Gorwood noted: "I've got a great team. The community have been absolutely wonderful. Absolutely fantastic. I've enjoyed absolutely tremendous local support from the community over Christmas." This sentiment was echoed by other local business owners who emphasized the tight-knit nature of the industrial community around Immingham and Grimsby.
